The ABS just released the April employment data which showed 14,200 jobs were created in the month, seasonally adjusted.
That means there are now approximately 11,573,000 Australians working while the total number unemployed stands at 713,400.
The break up of the data showed that all the jobs were full-time with no change in part-time employment, while the participation rate was roughly steady after a revision to the previous month’s data at 64.7%.
This is truly beautiful economic news, because over the past four months, with all the doom and gloom about job losses, the Australian economy has created more than 106,000 jobs.
That is 106,000 more Australian taking home a pay packet each week, fortnight and month. Money that will be spent and then recirculated around the economy. This encourages growth.
But the news looks even better, according to HSBC Chief Economist Paul Bloxham, who earlier this week shared a chart with Business Insider suggesting employment growth will continue in the months ahead.
While the blue dot shows the position of employment growth over the past 12 months, after today’s number if this relationship holds up as well as the data and Bloxham shared suggests, then there is going to be more good news coming down the line.
That means the Australian economy is transitioning, and on a solid — if still below trend — trajectory, and the time a 2.5% cash rate will be nearing an end.
It looks as though everything is on track in the Australian economy, with employment improving and its housing situation under control, though now the big unknown is how deep the cuts in Tuesday’s budget will be.
AMP Capital’s chief economist Shane Oliver summed it up in a note sent out shortly after the jobs numbers were released:
The main risk though is that next week’s Budget goes too hard in terms of near term welfare cuts, public sector cutbacks and tax hikes resulting in a blow to confidence and spending power that threatens the recovery in economic growth. As the OECD pointed out in relation to Australia “heavy front loading of fiscal consolidation should be avoided”. Hopefully it will be!
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